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Interim ReportJuly-September 2015

Johan Dennelind, President & CEO

**

Summary Q3 2015

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S E R V I C E R E V E N U E G R O W T H

E B I T D A* G R O W T H

E AR N I N G S P E R S H AR E

Reported +3.6%Organic -0.5%

Reported +3.1%Organic -0.9%

SEK 1.06+12.7%

* Excluding non-recurring items

2

Positive earnings trends in core operations

* Excluding non-recurring items

Organic EBITDA* growth y-o-y

Q115

Q215

Q315

Q115

Q215

Q315

Q115

Q215

Q315

-8.2%-8.2%

+3.2%+3.2%

• Performance in Sweden and Europe supported by improved service revenue growth trend

• Eurasia impacted by intensified competition and macro pressure, particularly in Kazakhstan

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Sweden Europe Eurasia

+1.2%+1.2%

Improved performance in Sweden

Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15

-1.8%-1.8%

+4.6%+4.6%

• B2C remains solid – pressure eased slightly in B2B

• Total service revenue growth 1 percent, 2 percent growth in mobile and stable fixed revenues

• ARPU supported by migration to higher data bundles in mobile, upsell to higher speeds in fixed broadband and price adjustments in TV

ARPU growth y-o-yService revenue growth* y-o-y

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B2B

B2C

* External service revenues **Excluding non-recurring items

+3.0% +3.2%

+7.2%

Q1 15 Q2 15 Q3 15 Q1 15 Q2 15 Q3 15 Q1 15 Q2 15 Q3 15

3

5

Solid execution in Norway

• Continued solid integration of Tele2 acquisition

• On track to deliver SEK 700 million in synergies in 2015 and reach full run-rate of SEK 1 billion in 2016

• Organic service revenue growth of 2.7 percent

Norway – EBITDA**, SEK million

M&A

Norway – service revenues*, SEK million

Organic

• Organic EBITDA growth of 8.5 percent driven by higher service revenues

• Integration cost of SEK 159 million in Q3 reported as non-recurring item

1,481

2,020

Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15

588

862

Q3 14 Q3 15

* External service revenues **Excluding non-recurring items

Organic

M&A

6

Finland in transformation – Danish J/V withdrawal

• Service revenues burdened by lower mobile interconnect rates and price erosion in B2B

• EBITDA decline driven by increased service levels within customer operations

Denmark – service rev*. & EBITDA**, SEK millionFinland – service rev*. & EBITDA**, SEK million

• Planned J/V with Telenor withdrawn as parties could not agree with competition authorities on acceptable merger conditions

• Stable EBITDA development, but on a low level

1,113 1,085

Q3 14 Q3 15

-4.5%-4.5%

204 211

Q3 14 Q3 15

+0.7%+0.7%

* External service revenues **Excluding non-recurring items

2,798 2,758

Q3 14 Q3 15

-3.7%-3.7%

1,064 1,048

Q3 14 Q3 15

-4.4%-4.4%

Service revenues EBITDA** Service revenues EBITDA**

= local organic growth

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7

Positive momentum in the Baltics

• Positive EBITDA growth in all three countries in the quarter, helped by better service revenues and cost control

Baltics - EBITDA** and organic growth, SEK million

616679

262 275

114 148

240 256

Baltics service revenue growth* y-o-y

-10%

-5%

0%

5%

Q1 15 Q2 15 Q3 15

Lithuania Latvia Estonia Baltics Total

• Service revenues supported by mobile ARPU growth and positive subscription intake in mobile, fixed broadband and TV

* External service revenues, local organic **Excluding non-recurring items

Q3 14 Q3 15

LithuaniaQ3 14 Q3 15

LatviaQ3 14 Q3 15

Estonia

+26.8%+26.8%

+3.8%+3.8%+2.8%+2.8%

Q3 14 Q3 15

Baltics total

+7.6%+7.6%

Eurasia impacted by pressure in Kazakhstan

Q3 Organic service revenue growth* y-o-y

• Growth in Nepal and Uzbekistan driven by higher customer base and increased usage respectively

• Performance impacted by high competition and macro weakness in several parts of the region

-16.2%

-8.7%

-8.7%

-4.5%

1.4%

10.8%

12.3%

Kazakhstan

Tajikistan

Azerbaijan

Georgia

Moldova

Uzbekistan

Nepal

Kazakhstan EBITDA % & subscription net adds

• Profitability impacted by revenue pressure and higher interconnect costs

• Subscription net adds are positive for the first time the last year

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* External service revenues **Excluding non-recurring items

28432

-500

-400

-300

-200

-100

0

100

200

300

400

500

-120%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

Q3 14 Q4 14 Q1 15 Q2 15 Q3 15

Subscription net adds ('000) EBITDA margin**

55.6%

43.3%

5

Process to leave Region Eurasia has started

• Thorough review of Region Eurasia concluded in the third quarter

• Decision made not to be a long-term owner of the subsidiaries in Eurasia

• The route to reduce exposure has started -likely to take some time due to high complexity

• Responsible exit program established

• Holdings in Turkcell and MegaFon separate scope

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10

Further steps within governance and sustainability

• Sustainability Update January-June 2015 published today

• Available at www.teliasonera.com

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**

Summary

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S O L I D C O R E O P E R AT I O N S L E AD I N G T H E W AY

P E R F O R M AN C E I N E U R AS I A I M P AC T E D B Y K AZ A K H S T A N

P R O C E S S T O R E D U C E P R E S E N C E I N E U R AS I A I N I T I AT E D

Interim ReportJuly-September 2015

Christian Luiga,

Senior Vice President & CFO

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**

Summary financials Q3 2015

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R E V E N U E G R O W T H W I T H S U P P O R T F R O M M & A AN D F X

I M P R O V E D E AR N I N G S T R E N D

F R E E C AS H F L O W I M P AC T E D B Y H I G H E R C AP E X

AN D L O W E R D I V I D E N D S F R O M AS S O C I A T E S

Revenue supported by Norway and FX effects

* External service revenues ** Q3 FX average

Reported service revenue* growth y-o-y

+3.6%+3.6%

Q3 14 Organic M&A FX Q3 15

• Mixed currency effects in the quarter, but overall a slight tailwind

• Reported service revenue growth boosted by currency tailwind and Tele2 Norway acquisition

Q3 FX change y-o-y versus SEK**

-29.6%

-9.7%

-7.2%

-7.1%

-2.6%

2.5%

9.2%

12.2%

Russia

Azerbaijan

Turkey

Norway

Kazakhstan

Euro

Uzbekistan

Nepal+1.2%+1.2%

+2.9%+2.9%

-0.5%-0.5%

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8

High growth in low margin equipment sales

* In local currencies, excluding acquisitions and disposals ** Growth year-on-year in reported currency

Net sales growth* impact

Net salesQ3 14

Billedrevenues

Interconnectrevenues

Other mobileservice

revenues

Fixed servicerevenues

Other servicerevenues

Equipmentsales

Net salesQ3 15

Equipment sales growth**

-40%

-20%

0%

20%

40%

Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15

Sweden Europe

• High demand for mobile handsets continue to boost sales

• Mobile billed revenues increased in Sweden and Finland, but declined in Eurasia

• Fixed service revenues supported by fiber roll-out

• Equipment sales continue to grow in both Sweden and Europe

• In Q3 equipment sales increased by almost SEK 800 million y-o-y

+2.4%+2.4%

-0.2%-0.2% -0.3%-0.3% -0.1%-0.1%

+0.2%+0.2% +0.1%+0.1%

+2.8%+2.8%

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Improved earnings trend

* Excluding non-recurring items

EBITDA* growth y-o-y

Q3 14 Organic M&A FX Q3 15

+3.1%+3.1%

• Synergies from Tele2 Norway acquisition more than compensate for slight organic EBITDA decline

+1.0%+1.0%+2.9%+2.9%

-0.9%-0.9%

EBITDA* growth organic y-o-y

Q1 15 Q2 15 Q3 15

-5.1%-5.1%

-0.9%-0.9%

-4.0%-4.0%

• Pressure on organic earnings continued to ease in the quarter, supported by improved revenue trend

• Support from cost initiatives within procurement and personnel reductions of almost 400 employees in Q3

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9

Transformation starting to gain pace

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• Approximately SEK 450 million invested in the first 9 months

Area Status Targets 2017/2018

Fewer products and offerings 9% 80%

Fewer IT systems 9% 50%

Share of services and sales online 23% >50%

Fewer products and offerings 8% 80%

Fewer IT systems 5% 80%

Share of services and sales online 15% >50%

-2.0

2.0

Accumulatedinvestments2015-2016

Net savings run-rateto be reached 2017

Investments and savings, SEK billion

EPS supported by higher contribution from associates

Earnings per share, SEK

• Higher contribution from associated companies MegaFon and Turkcell

• Net financials supported by positive FX effects

0.940.941.061.06

-0.00-0.00 -0.02-0.02-0.07-0.07

+0.08+0.08+0.07+0.07

+0.07+0.07

-0.01-0.01

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10

Investing in superior connectivity

CAPEX* split 9 months

* Excluding license and spectrum fees19

Q3 14 Q4 14 Q1 15 Q2 15 Q3 15

Telia passed, not connectedCommunication operatorTelia connected (MDUs + SDUs)

Fiber households in Sweden

• High fiber installations in Q3 with close to 50,000 new homes passed, of which nearly 30,000 connected

1,252,0001,252,000

1,066,0001,066,000

Fiber 4G Other

• Group CAPEX increased 24 percent y-o-y in the first nine-months

• Investments in Sweden account for one-third of group CAPEX, mainly related to fiber and 4G

Sweden EuropeEurasia Other

Group Sweden

Free cash flow higher due to Turkcell dividend

Free cash flow 9M, SEK billion

• Turkcell dividend of SEK 4.7 billion net of tax received in Q2, partly offset by lower dividend from MegaFon in Q3

• Higher CAPEX according to plan in Sweden and Europe

11.411.4

13.913.9

+0.8+0.8

+3.5+3.5 +0.5+0.5 +0.1+0.1 +0.2+0.2

-0.5-0.5-2.0-2.0 -0.2-0.2

* Excluding non-recurring items

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11

Lower net debt

Net debt change q-o-q

Q2 15 CF fromoperatingactivities*

Cash CAPEX AF Telecompayment

FX & Other Q3 15

61.561.5

• Net debt lower, mainly due to AF Telecom payment of SEK 2.7 billion

• Net debt/EBITDA 1.70x (1.91x end Q2 2015)

-8.7-8.7

68.568.5

-2.7-2.7

+0.1+0.1+4.3+4.3

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* Excluding interest received from AF Telecom

Eurasia’s share of FCF and Net debt

Free cash flow, SEK billion

• Net cash in Eurasia amount to approximately SEK 9.4 billion, of which SEK 5.8 billion relate to Nepal and Uzbekistan

• Eurasia accounted for approximately one-third of free cash flow in Q3

Net debt, SEK billion

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2.74.90.4

5.7

1.6

3.3

Q3 15 Jan-Sep 15

Eurasia

Dividends from associated companies

Other

Group Eurasia Group ex. Eurasia

13.913.970.970.99.49.4

61.561.5

4.74.7

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Clear priority for capital allocation

0.0

0.5

1.0

1.5

2.0

2.5

FY 2011 FY 2012 FY 2013 FY 2014 Q3 2015

• Currently not possible to estimate the size of potential sales proceeds from Eurasia

• Clear ambition to maintain solid investment grade rating in line with the current target of A- or BBB+

• Current rating: Moody's at A3 (outlook Negative) and Standard & Poor's at A- (outlook Stable)

23

Net debt/EBITDA

Full year outlook slightly trimmed due to Kazakhstan

* Excluding non-recurring items , in local currencies, excluding acquisitions and disposals** Excluding license and spectrum fees, currency fluctuations may impact the reported number in Swedish krona

24

Slightly below 2014 (prev. around 2014 level) EBITDA*

Around SEK 17 billion (unchanged)

Target at least SEK 3 per share (unchanged)

CAPEX**

DIVIDEND

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Q & AQ & A25

Summary Q3 2015

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Jul-Sep 2015 Jul-Sep 2014 Change (%)

Net sales (SEK million) 27,029 25,417 +6.3

Change local organic (%) +2.4

Service revenues (SEK million) 23,687 22,856 +3.6

Change local organic (%) -0.5

EBITDA* (SEK million) 9,730 9,439 +3.1

Change local organic (%) -0.9

EBITDA* Margin (%) 36.0 37.1

EPS (SEK) 1.06 0.94 +12.7

Free cash flow (SEK million) 4,699 6,387 -26.4

* Excluding non-recurring items

14

Financial key ratios

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Sep 30, 2015 Dec 31, 2014

Return on equity* 15.1 15.0

Return on capital employed* 11.6 12.2

Equity/assets ratio 37.3 38.0

Net debt/equity ratio 62.2 57.4

Net debt/EBITDA** ratio 1.70 1.68

Net debt/assets ratio 23.2 21.8

* Rolling 12 months ** Rolling 12 months, excluding non-recurring items

Debt Maturing next 12 months – 2015 and onwards

Debt Portfolio Maturity Schedule – 2015 and onwards

Debt maturity schedule

0

2

4

6

8

10

12

14

16

18

2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051 2054 2057 2060 2063

SEK billion

SEK billion

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Debt per Q3 2015

• Gross debt SEK 100.5 billion

• Net debt SEK 61.5 billion

• Net debt/EBITDA 1.70x

0

1

2

3

4

5

6

Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16

15

Dividend policy

• The company shall target a solid investment grade long-term credit rating (A- to BBB+)

• TeliaSonera shall target to distribute an annual dividend of at least SEK 3 per share for the fiscal year 2015

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Forward-looking statements

Statements made in this document relating to future status or circumstances, including future performance and other trend projections are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of TeliaSonera.

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